Silicon Valley and Wall Street heavyweights are looking to invest in Midwest startups

Investor and tech entrepreneur Steve Case has launched Rise of The Rest, a new seed investment fund targeting companies in the middle of the country.

Rise of The Rest has garnered some big-name backers, including John Doerr, Jim Breyer, Henry Kravis, David Rubenstein, Eric Schmidt, Tory Burch, Ray Dalio, and Howard Schultz, just to name a few.

Case said that there are probably hundreds of companies that are “breakthrough unicorn, multibillion-dollar” companies in places like Indianapolis, Pittsburgh, and Provo, Utah that are “just off the radar.”

“There’s more momentum behind these. And in the third wave of the internet, there is huge opportunity. The expertise and the talent in the middle of the country is really extraordinary. The problem has been the venture capital hasn’t been there. And we’re trying to build a bridge,” Case told Yahoo Finance.

The third wave of the internet is where it becomes integrated with health care, food, agriculture, transportation and smart cities, Case explained.

“A lot of expertise that’s going to be important, a lot of partnerships that are going to be really transformative are going to be in the middle of the country,” Case said. “So the center of gravity, I think, will shift in the third wave from being Silicon Valley being so dominant, because that was the second wave was sort of a software-centric era, to in the third wave where expertise around farming, or expertise around, you know, health care delivery.”

Steve Case, Chairman and CEO of Revolution LLC and co-founder of America On Line (Photo by Bill Pugliano/Getty Images)

Historically, venture capital money has flocked to three states — California, New York, and Massachusetts. This has resulted in a “brain drain,” where people who grew up and were educated in the Midwest move to Silicon Valley for the opportunities.

“So the talent is there. We just have to slow the brain drain, and then accelerate so the boomerang is now, where people who didn’t leave for some reason now see there’s opportunity to come back,” Case said.

Over the last three-and-a-half years, Rise of The Rest has made six road trips across America, visiting 33 cities. Ahead of those trips, the firm engages with regional investors, entrepreneurs, and elected officials to get a sense of what’s happening in those cities. They also host pitch competitions.

“The network we built in these cities, and the regional investors we have partnerships within these cities obviously are a great source of deal flowing for us as well,” Case said. “So we don’t have a deal flow problem. There really are extraordinary companies that are happening now growing all over the country. We just need to be, you know, smart about curating them, and investing in the best ones, and then creating a network essentially with the regional investors, a network with these regional entrepreneurs.”

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.